A MAJORITY of General Motors bondholders agreed to support a plan to exchange debt for an ownership stake in the company as high as 25 per cent, The New York Times reported over the weekend.
Investors holding a little over 50 per cent of GM's $US27 billion ($33 billion) of debt agreed to the swap, removing the last roadblock for General Motors to file for bankruptcy protection today.
Bondholders will initially get a 10 per cent stake in the company, with warrants for an additional 15 per cent. GM has scheduled a news conference today in New York, where it is expected to make its bankruptcy filing.
GM stock fell to US75c on Friday, below the $US1 minimum normally needed to trade on the New York Stock Exchange.
A restructured General Motors will be controlled by the US Government, with the Canadian Government possibly owning a small share.
A union health-care trust will own 17.5 per cent and 10 per cent will be given to the old GM to hand to creditors to resolve claims, according to a regulatory filing.
On Friday, German Chancellor Angela Merkel's Government chose the Canadian car-parts maker Magna International as the buyer for GM's Opel division and confirmed a financing plan aimed at helping the unit avert insolvency. Magna beat Fiat in its bid for Opel.
Germany will provide a €1.5 billion ($2.6 billion) loan to keep Opel afloat. Opel will be placed under a trust, shielding it from GM's bankruptcy.
In Australia, the Industry Minister, Kim Carr, was confident yesterday that GM's Australian subsidiary, Holden, would survive "even if General Motors [does] go in chapter 11 bankruptcy".
"I remain very optimistic that Holden will weather the global financial storm and emerge stronger," he said.
"Holden has already undergone significant restructuring," he said. "The co-operative efforts of management, workers and the Australian Government have put the company in a good position to deal with whatever General Motors may announce in the coming days.
"It is important to remember that chapter 11 bankruptcy in the US is very different to bankruptcy in Australia. It does not mean GM is being liquidated or is going out of business."
Last month, Holden announced it would switch to a single shift at its assembly operations in Adelaide, saving workers' jobs and helping the plant survive the global recession .
Senator Carr said the production of a new four-cylinder vehicle in Australia meant Holden was a relatively high priority in GM's global operations.
"GM's February restructure statement noted that Holden Australia was seen as 'viable' due to Australian Government support for the new four cylinder fuel-efficient car," he said.
Bloomberg and AAP
